Pentax Corp revealed yesterday its Shanghai digital camera manufacturing plant will be put into operation by the end of this year in a bid to tap the huge Chinese market.

With an initial investment of 300 million yen (US$2.7 million), PENTAX Shanghai Corp will have a monthly output of around 20,000 digital cameras in its initial phase, the Japanese company announced.

"The demand for high-end cameras will soar on the Chinese mainland due to increasing personal wealth," Urano Fumio, chief executive officer and president of PENTAX, said in Shanghai yesterday.

The total sales volume of digital cameras on the mainland will reach 1 million sets this year, a figure that would double in 2005, PENTAX predicts. Currently, PENTAX owns a 2 percent slice of the domestic digital camera market.

"The launching of the local plant, which is also our first manufacturing unit on the mainland, signals our official entry into the domestic market," said Fumio. "We estimate our share in the Chinese digital camera market could climb up to 5 percent within two years."

In addition, PENTAX has already made technological preparations to facilitate its expansion here.

It teamed up with Shanghai Jiao Tong University in January to set up an optomechatronics technology development center in Shanghai.

Meanwhile, many global camera giants, such as Eastman Kodak Co, Fuji Photo Film Co and Sony Corp, have already begun camera production in China, hoping to boost profitability by using China's low labor costs.

Industry officials say it is vital for these camera makers to maintain cost competitiveness, especially as digital camera prices continue to slide.

Japan-based Minolta Co said that it hopes to transfer production of digital cameras into its local joint venture, Shanghai Minolta Optical Products Co, by the end of 2003.

(Shanghai Daily September 18, 2003)